Microbreweries protest proposed abolishment of the state monopoly liquor stores

Segull Brewery One of the new small microbreweries which have sprung up in the past few years is Segull, based in Siglufjörður, North Iceland. Photo/Segull 67

Members from four parties in parliament have submitted a bill to abolish the current state monopoly on the retail distribution of alcoholic beverages. Currently drinks containing more than 2.25% alcohol by volume can only be sold in retail at the state owned Vínbúðin stores. If the bill is passed into law the Vínbúðin stores will be closed and instead beer, wine and hard liquor would instead be sold in grocery stores or specialty stores.

Stiff opposition, but still best chance of passage to date
Similar bills have been proposed on several occasions since the 1990s, but never made it out of committee. This is the third time this exact same bill is submitted to parliament.

However, local political observers believe the bill has never stood as good a chance of passing. Still, it has been met with stiff opposition from across the political spectrum, as it remains hotly contested even within the parties whose members have signed on as sponsors.

Small breweries fear only big producers will gain
Domestic microbreweries have also come out in opposition to the bill, as they argue that abolishing the state monopoly stores Vínbúðin, would only benefit larger breweries, while hurting small producers.

The owner and brewmaster of Segull 67, a small microbrewery in the town of Siglufjörður in North Iceland, told the Icelandic National Broadcasting Service that the current arrangement is ideal for small producers: "I used to advocate for the abolishment of the state monopoly, but now, when I am actually running my own little brewery, I am more keenly aware of the uncertainty and problems that would cause."

He points out that the state monopoly handles the distribution and sale for the small producers, providing huge savings. Instead of being in in contact with just one large distributor, small producers would have to be in contact with countless retailers, scattered around the country. Each producer would have to establish a sales- and distribution force. "For us, smaller producers, this could be quite difficult," he notes.

Public health concerns and a giveaway to big retailers
Doctors and public health officials have also protested the change, arguing that foreign studies show that the consumption of alcohol could increase by as much as 40% when it is introduced in grocery stores.

Members from the three parties making up the governing coalition, the conservative Independence party, the center right Restoration and centrist Bright future sponsor the bill, as well as members of the anti-establishment Pirate Party. More socially conservative members of the Independence Party and some members of the Pirate party have opposed the bill, citing concern with public health. Members of the center right and socially conservative Progress Party have similarly opposed the bill.

Members of the Left Green Movement have also come out in opposition, arguing the bill is a giveaway to big retailers. Among those who have lobbied for a change in the law are the big local supermarkets Hagkaup and Bónus, as well as the representatives of US retailing giant Costco, which plans to open a store in the Metropolitan area in May.